Kaulgud Constructions Private Ltd., Miraj V. Joint Commissioner of Income-tax,

ITA 409/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1033 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 17-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 03-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAVRE
• Assessee Lawyers: NANI WADEKAR
• Section: 143(3); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE PUNE BENCH A , PUNE , . . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO S . 408 & 409 /PN/20 1 4 / ASSESSMENT YEAR S : 20 0 9 - 1 0 & 20 1 0 - 11 KAULGUD CONSTRUCTIONS PVT. LTD., KAULGUD CONSTRUCTIONS PVT. LTD., 3884, MALEKAR WADA, BRAHMINPURI, MIRAJ 416410 . / APPELLANT PAN: AABCK7353A VS. THE JOINT COMMISSIONER OF INCOME TA X, RANGE - 2 , SANGLI . / RESPONDENT / APPELLANT BY : SHRI NANIWADEKAR / RESPOND ENT BY : SHRI ANIL CHAVRE / DATE OF HEARING : 29 .0 8 .201 6 / DATE OF PRONOUNCEMEN T: 09 . 09 .201 6 / ORDER PER SUSHMA CHOWLA, JM: BOTH THE APPEAL S FILED BY THE ASSESSEE ARE AGAINST SEPARATE ORDER S OF CIT (A) , KOLHAPUR , BOTH DATED 20 . 12 .201 3 RELATING TO ASSESSMENT YEAR S 20 0 9 - 1 0 AND 20 1 0 - 11 AGAINST RESPECTIVE ORDERS PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) . TAX ACT, 1961 (IN SHORT THE ACT) . ITA NO S. 408 & 409 /PN/201 4 KAULGUD CONSTRUCTIONS PVT. LTD. 2 2. BOTH THE APPEALS RELATING TO THE SAME ASSESSEE ON IDENTICAL ISSUE S WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3 . FIRST, WE SHA LL TAKE UP THE APPEAL IN ITA NO. 408 /PN/201 4 , WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1 . THE LEARNED C. I. T.(A) ERRED ON FACTS AND IN LAW IN UPHOLDING DISALLOWANCE OF LABOUR CHARGES TO THE EXTENT OF RS.4 LACS. HE OUGHT TO HAVE APPREC IATED THE NATURE OF BUSINESS, SUBMISSIONS OF THE ASSESSEE AND PAST HISTORY. IN ANY CASE, THE DISALLOWANCE IS ON AD - HOC BASIS AND NO DEFECTS IN THE BOOKS WERE FOUND. THE DISALLOWANCE IS ON AD - HOC BASIS AND NO DEFECTS IN THE BOOKS WERE FOUND. 2 . THE LEARNED C. I. T.(A) ERRED ON FACTS AND IN LAW IN UPHOLDING DISALLOWANCE OF RS.3,48,518 OUT OF CASH PURCHASES (BEING 10 % OF THE EXPENSES). HE OUGHT TO HAVE APPRECIATED THE NATURE OF BUSINESS, SUBMISSIONS OF THE ASSESSEE AND PAST HISTORY. IN ANY CASE, THE DISALLOWANCE IS ON AD - HOC BASIS AND NO DEFECTS IN THE BOOKS WERE FOUND. 3 . THE LEARNED C. I. T.(A) ERRED ON FACTS AND IN LAW IN UPHOLDING DISALLOWANCE OF RS.1,64,224 OUT OF VARIOUS EXPENSES (BEING 10% OF THE EXPENSES). HE OUGHT TO HAVE APPRECIATED THE NATURE OF BUSINESS, SUBMISSIONS OF THE ASSESSEE AND PAST HISTORY. IN ANY CASE, THE DISALLOWANCE IS ON AD - HOC BASIS AND NO DEFECTS IN THE BOOKS WERE FOUND. 4. THE FIRST ISSUE RAISED BY THE ASSESSEE BY WAY OF GROUND OF APPEAL NO.1 IS AGAINST THE DISALLOWANCE OF LABOUR CHARGES TO THE EXTENT OF RS.4 LAKHS. 5. BRIEFLY, IN THE FACTS OF THE CASE, THE AS SESSEE HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,10,50,190/ - . THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION DOING WORK MAINLY FOR MKVDC, CENTRAL RAILWAY AND BHARAT PETROLEUM CORPORATION LTD. ON PERUSAL OF ACCOUNTS FIL ED BY THE ASSESSEE AND THE BOOKS OF ACCOUNT PRODUCED FOR VERIFICATION, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD DEBITED SUM OF RS.76,18,657/ - AS LABOUR CHARGES UNDER THE HEAD CONSTRUCTION EXPENSES. THE ASSESSING OFFICER FURTHER NOTED THAT THE L ABOUR CHARGES WERE SUPPORTED BY BILLS AND VOUCHERS, OUT OF WHICH SOME OF THE BILLS WERE SUPPORTED BY SELF - MADE VOUCHERS AND SOME OF VOUCHERS WERE NOT FULLY VERIFIABLE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ITA NO S. 408 & 409 /PN/201 4 KAULGUD CONSTRUCTIONS PVT. LTD. 3 DID NOT DENY THE FACT THAT SOME OF THE BILLS AND VOUCHERS WERE NOT FULLY VERIFIABLE . THE ASSESSING OFFICER IN ORDER TO COVER UP ANY POSSIBLE OMISSIONS AND COMMISSIONS, DISALLOWED 10% OUT OF LABOUR CHARGES AT RS. 7,61,865/ - . 6. THE CIT(A) ON THE OTHER HAND, FOLLOWING HIS DECISION IN ASSE SSMENT YEAR 2010 - 11 CONFIRMED THE DISALLOWANCE OF RS.4 LAKHS, AGAINST WHICH THE ASSESSEE IS IN APPEAL. 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSEE WAS ENGAGED IN CIVIL CONSTRUCTION AT VARIOUS SITES OF MAHARASHTR A AND THE LABOUR CHARGES WERE BEING PAID AT THE SAID SITES. IN THE PRECEDING YEAR, THE ASSESSEE HAD ACCEPTED THE DISALLOWANCE OF 1% OUT OF LABOUR CHARGES BUT IN THE PRESENT YEAR, THE ASSESSING OFFICER DISALLOWED 10% OF THE TOTAL EXPENSES, WHICH WERE RESTR ICTED TO ABOUT 5% BY THE CIT(A) AT RS.4 LAKHS. HE FURTHER CONTENDED THAT THE DISALLOWANCE WAS ON HIGHER SIDE. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF CIT(A). 9. WE HAVE HEARD THE RIVA L CONTENTIONS AND PERUSED THE RECORD. THE ISSUE RAISED VIDE GROUND OF APPEAL NO.1 IS IN RELATION TO DISALLOWANCE OUT OF LABOUR CHARGES. THE ASSESSEE WAS CARRYING THE BUSINESS OF CIVIL CONSTRUCTION AND HAD UNDERTAKEN WORK FOR MKVDC, CENTRAL RAILWAY AND BH ARAT PETROLEUM CORPORATION LTD . THE ASSESSEE HAD DEBITED THE LABOUR CHARGES EXPENSES UNDER THE HEAD CONSTRUCTION EXPENSES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE PRODUCED THE BILLS AND VOUCHERS IN SUPPORT AND SOME OF THE VOUCHERS WER E FOUND TO BE SELF - MADE VOUCHERS. THE LEARNED AUTHORIZED REPRESENTATIVE FOR ITA NO S. 408 & 409 /PN/201 4 KAULGUD CONSTRUCTIONS PVT. LTD. 4 THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS FAIRLY CONCEDED THAT THE VOUCHERS WERE NOT FULLY VERIFIABLE. THE ASSESSING OFFICER IN THIS REGARD DISALLOWED 10% OF THE T OTAL EXPENDITURE RESULTING IN ADDITION OF RS.7,61,865/ - . HOWEVER, THE CIT(A) RESTRICTED THE ADDITION TO RS.4 LAKHS. THE CASE OF THE ASSESSEE BEFORE US IS THAT EVEN IN THE PRECEDING YEAR, DISALLOWANCE WAS MADE OUT OF LABOUR CHARGES BUT THE SAME WAS ONLY T O THE EXTENT OF 1%. HE FURTHER STATED THAT THE ASSESSEE WAS WORKING WITH UN ORGANIZED SECTOR AND THOUGH THE CONTRACT RECEIPTS HAD SUBSTANTIALLY INCREASED DURING THE YEAR AS COMPARED TO THE EARLIER YEARS BUT THE PERCENTAGE OF LABOUR CHARGES TO THE CONTRACT RECEIPTS HAD GONE DOWN DURING THE YEAR. THE ASSESSEE CLAIMED THAT THE DISALLOWANCE AT RS.4 LAKHS IS HIGHER. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WHERE THE ASSESSEE ADMITS THAT THERE IS CERTAIN ELEMENT OF NON - VERIFIABLE VOUCHERS, DIS ALLOWANCE OUT OF LABOUR CHARGES IS MERITED. HOWEVER, WE RESTRICT THE DISALLOWANCE TO RS.2 LAKHS IN ORDER TO MEET THE ENDS OF JUSTICE. THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS THUS, PARTLY ALLOWED. 10. THE ISSUE IN GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE OUT OF CASH PURCHASES TO THE TUNE OF RS.3,48,518/ - . 11. BRIEFLY, THE FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE WAS MAKING CERTAIN CASH PURCHASES THROUGH SELF - MADE VOUCHERS TO THE EXTENT OF RS. 34,85,182/ - . SINCE THE SAID EXPENDITURE WAS NOT FULLY VERIFIABLE, THE ASSESSING OFFICER DISALLOWED 10% OF SUCH CASH PURCHASES RESULTING IN ADDITION OF RS.3,48,518/ - . 12. THE CIT(A) UPHELD THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. ITA NO S. 408 & 409 /PN/201 4 KAULGUD CONSTRUCTIONS PVT. LTD. 5 13. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 14. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT DISALLOWANCE MADE WAS ON HIGHER SIDE AND ALSO NO DISALLOWANCE WAS MADE IN THE EARLIER YEARS. 15. ON PERUSAL OF RECORD, IT IS APPARENT THAT ADM ITTEDLY, THE ASSESSEE HAD MADE CERTAIN CASH PURCHASES TO THE TUNE OF RS.34,85,182/ - . THE ASSESSEE FURTHER ADMITTED THAT THE SAID CASH PURCHASES WERE BACKED BY SELF - MADE VOUCHERS, WHICH ADM ITTEDLY CANNOT BE FULLY VERIFIABLE. IN THE LINE OF BUSINESS OF ASS ESSEE, NO DOUBT, SUCH PURCHASES HAVE TO BE MADE BUT IN THE ABSENCE OF PROPER VOUCHERS, DISALLOWANCE OUT OF SAID EXPENDITURE IS MERITED. HOWEVER, WE RESTRICT THE SAID DISALLOWANCE TO 5% OF THE TOTAL CASH PURCHASES. THE GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS THUS, PARTLY ALLOWED. 16. THE THIRD SET OF DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS ON ACCOUNT OF VARIOUS EXPENSES I.E. POSTAGE & TELEPHONE, REPAIRS & MAINTENANCE AND TRAVELLING TOTALING RS.16,42,248/ - . THE DISALLOWANCE WAS MADE ON ACCO UNT OF ELEMENT OF PERSONAL EXPENDITURE OF DIRECTORS AND THEIR FAMILY MEMBERS. FURTHER, SOME OF THE EXPENSES WERE SUPPORTED BY SELF - MADE VOUCHERS, WHICH WERE NOT VERIFIABLE AND ALSO NO TELEPHONE CALL REGISTER FOR TELEPHONE WAS MAINTAINED. THE ASSESSING OF FICER REITERATED THAT THE ELEMENT OF PERSONAL EXPENDITURE BY THE DIRECTORS OF THE ASSESSEE COMPANY AND THEIR FAMILY MEMBERS COULD NOT BE RULED OUT. IN VIEW THEREOF, 10% OF THE TOTAL EXPENSES WERE DISALLOWED RESULTING IN ADDITION OF RS. 1,64,224/ - . THE CIT (A) UPHELD THE AFORESAID ADDITION. ITA NO S. 408 & 409 /PN/201 4 KAULGUD CONSTRUCTIONS PVT. LTD. 6 17. BEFORE GOING INTO THE MERITS OF THE CLAIM OF ASSESSEE, WHETHER IT IS SUPPORTED BY SELF - MADE VOUCHERS OR OTHERWISE, THE FIRST ASPECT TO CONSIDER IN THE PRESENT GROUND OF APPEAL IS THAT THE ASSESSEE IS A PRIVATE LIMITE D COMPANY AND THE EXPENDITURE INCURRED BY THE ASSESSEE ON ACCOUNT OF POSTAGE & TELEPHONE, REPAIRS & MAINTENANCE AND TRAVELLING EXPENSES IS DEBITED TO THE ACCOUNT OF PRIVATE LIMITED COMPANY FOR RUNNING ITS BUSINESS. IT IS AN ESTABLISHED RULE OF LAW THAT NO ELEMENT OF PERSONAL EXPENDITURE OUT OF SUCH EXPENDITURE WHICH IS DEBITED TO THE ACCOUNT OF PRIVATE LIMITED COMPANY CAN BE ATTRIBUTED AS PERSONAL EXPENDITURE OF DIRECTORS OR THEIR FAMILY MEMBERS. ACCORDINGLY, THERE IS NO MERIT IN DISALLOWING ANY PART OF S AID EXPENDITURE FOR PERSONAL USE BY THE DIRECTORS OR THEIR FAMILY MEMBERS. THE DISALLOWANCE MADE AT RS.1,64,224/ - IS DELETED. 18. NOW, COMING TO THE APPEAL IN ITA NO.409/PN/2014 . 19. THE ISSUE IN GROUND OF APPEAL NO.1 IS AGAINST THE DISALLOWANCE OUT O F LABOUR CHARGES TO THE TUNE OF RS.20 LAKHS. 20. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DEBITED LABOUR CHARGES TO THE EXTENT OF RS.3.33 CRORES AND THE ASSESSING OFFICER HAD DISALLOWED 10% OF THE SAID EXPENDITURE WHICH WAS RESTRICTED TO RS.2 0 LAKHS BY THE CIT(A) ON THE BASIS AS IN THE EARLIER YEAR. THE ASSESSEE IN THE TABULATED CHART HIMSELF HAS POINTED OUT THAT THE PERCENTAGE OF LABOUR CHARGES TO CONTRACT RECEIPTS DURING THE YEAR UNDER CONSIDERATION HAD INCREASED TO 8.90% AS AGAINST 2.41% D ECLARED IN THE PRECEDING YEAR AND 3.20% DECLARED IN FINANCIAL YEAR 2007 - 08. ADMITTEDLY, THE LABOUR CHARGES DURING THE YEAR UNDER CONSIDERATION HAD SUBSTANTIALLY INCREASED FROM ABOUT RS.76 LAKHS IN ASSESSMENT YEAR 2009 - 10 TO RS.3.33 CRORES IN ASSESSMENT YE AR 2010 - 11. FURTHER, THE ASSESSEE HAS FAILED TO PRODUCE COMPLETE ITA NO S. 408 & 409 /PN/201 4 KAULGUD CONSTRUCTIONS PVT. LTD. 7 BILLS AND VOUCHERS IN SUPPORT THEREOF AND HAS CLAIMED THAT SOME OF BILLS WERE NOT FULLY VERIFIABLE AND ALSO SOME OF THE BILLS WERE SUPPORTED BY SELF - MADE VOUCHERS. IN THE TOTALITY OF THE AB OVE SAID FACTS AND CIRCUMSTANCES AND IN LINE WITH OUR DELIBERATIONS IN THE PRECEDING YEAR, WE RESTRICT THE DISALLOWANCE TO RS.10 LAKHS AS AGAINST RS.20 LAKHS MADE BY THE CIT(A). THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS THUS, PARTLY ALLOWED. 21 . THE ISSUE IN GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS IDENTICAL TO THE GROUND OF APPEAL NO.2 RAISED IN ASSESSMENT YEAR 2009 - 10 AND FOLLOWING THE SAME PARITY OF REASONING, WE RESTRICT THE DISALLOWANCE OUT OF CASH PURCHASES AT 5% AND HENCE, THE GROU ND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS DISMISSED SINCE THE CIT(A) HAD DISALLOWED ONLY 5% OF THE TOTAL EXPENDITURE. 22. THE ISSUE IN GROUND OF APPEAL NO.4 RAISED BY THE ASSESSEE IS AGAINST THE DISALLOWANCE OUT OF VARIOUS EXPENSES ON ACCOUNT OF PERSONA L ELEMENT. THE ISSUE RAISED VIDE THIS GROUND OF APPEAL IS IDENTICAL TO THE ISSUE RAISED VIDE GROUND OF APPEAL NO.3 IN ASSESSMENT YEAR 2009 - 10 AND FOLLOWING THE SAME PARITY OF REASONING, WE HOLD THAT NO DISALLOWANCE WAS WARRANTED OUT OF VARIOUS EXPENSES ON ACCOUNT OF PERSONAL ELEMENT. THE GROUND OF APPEAL NO.4 IS THUS, ALLOWED. 23. NOW, COMING TO THE GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE WHICH READS AS UNDER: - 3. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING ADDITION OF RS.5 LACS ON AC COUNT OF ALLEGED FALL IN GROSS PROFIT RATE. HE FAILED TO APPRECIATE THAT THE ASSESSEE IS A LIMITED COMPANY AND ITS ACCOUNTS ARE DULY AUDITED UNDER VARIOUS LAWS. HE ALSO FAILED TO APPRECIATE THAT THE NET PROFIT RATE HAS ACTUALLY RISEN DURING THE YEAR. HE ALSO FAILED TO APPRECIATE THE CONTENTIONS AND ARGUMENTS OF THE ASSESSEE IN THIS BEHALF. 24. BRIEFLY, THE FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSING OFFICER NOTED THAT THERE WAS FALL IN GP RATE AS COMPARED TO THE PRECEDING YEAR I.E. FROM 11.34% ITA NO S. 408 & 409 /PN/201 4 KAULGUD CONSTRUCTIONS PVT. LTD. 8 T O 11.21%. THE ASSESSEE EXPLAINED THE REASON FOR SAID FALL IN GP RATE ON ACCOUNT OF INCREASE IN MATERIAL PRICES AS COMPARED TO THE TENDERED PRICES AND ALSO POINTED OUT THAT THE GP RATE FOR ANY YEAR COULD NOT REMAIN CONSTANT. THE SUBMISSIONS OF ASSESSEE AR E REPRODUCED AT PAGES 4 AND 5 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER CONSIDERED THE PLEA OF ASSESSEE THAT THERE WAS INCREASE IN EXPENDITURE OF SITE LABOURERS MEALS, SUPERVISOR SALARY AND VEHICLE RUNNING EXPENSES AND ALSO INTEREST PAYMENTS AND OTH ER EXPENSES. HOWEVER, REJECTING THE SAME IN ORDER TO COVER UP THE POSSIBLE OMISSIONS AND COMMISSIONS, AN ADHOC ADDITION OF RS.5 LAKHS WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE, WHICH WAS UPHELD BY THE CIT(A), AGAINST WHICH THE ASSESSEE IS IN APPEAL. 2 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD SHOWN CONTRACT RECEIPTS TO THE EXTENT OF RS.37.50 CRORES AND WAS CARRYING ON THE CONTRACT WORK AT VARIOUS SITES. THE EXPLANATION OF THE ASSES SEE WAS THAT BECAUSE OF VARIOUS CONTRACT WORKS BEING CARRIED OUT AT DIFFERENT SITES, THERE WAS INCREASE IN CONVEYANCE EXPENSES AND ALSO THE COST OF RAW MATERIAL HAD INCREASED WHICH AFFECTED ITS GP. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD DECL ARED GP RATE OF 11.21%. THE ASSESSING OFFICER WAS OF THE VIEW THAT AS AGAINST THE GP RATE OF 11.34% SHOWN IN THE PRECEDING YEAR, THE RESULTS SHOWN FOR THE YEAR UNDER CONSIDERATION NEEDS SOME ADJUSTMENT AND AN ADHOC ADDITION OF RS.5 LAKHS WAS MADE TO THE T OTAL INCOME OF THE ASSESSEE. WE FIND NO MERIT IN THE SAID ADDITION BEING MADE BY THE ASSESSING OFFICER IN THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES, WHERE NO FAULT WAS FOUND IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE AND WHICH W ERE NOT EVEN REJE CTED. ACCORDINGLY, THE GP RATE DECLARED BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION WAS LOWER AS COMPARED TO THE EARLIER YEAR, CANNOT BE THE BASIS FOR MAKING AN ADHOC ADDITION OF RS.5 LAKHS. THE ASSESSEE HAS FILED ITA NO S. 408 & 409 /PN/201 4 KAULGUD CONSTRUCTIONS PVT. LTD. 9 ELABORATE SUBMISSIONS EXPLAINING THE REASONS FOR FALL IN GP RATE DURING THE YEAR WHEN COMPARED TO THE RESULTS OF EARLIER YEAR WHICH ARE REPRODUCED AT PAGES 4 AND 5 OF THE ASSESSMENT ORDER AND LOOKING THROUGH THE SAID EXPLANATION, WE FIND NO MERIT IN THE ADDITION MADE BY THE ASSESSING OFFICER AND GP OF ANY CONCERN CANNOT BE CONSTANT AND THERE IS NO MERIT IN THE ORDER OF ASSESSING OFFICER IN MAKING THE AFORESAID ADHOC ADDITION OF RS.5 LAKHS WHICH IS DELETED. WE HOLD SO. THE GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE IS THUS, ALLOWED. THE G ROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 26 . IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 9 TH DAY OF SEPTEMBER , 201 6 . SD/ - SD/ - ( R.K. PANDA ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; D ATED : 9 TH SEPTEMBER , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) , KOLHAPUR ; 4. / THE CIT - I / II, KOLHAPUR / CIT (CENTRAL), PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE